Deal Closed | Juris Corp | Voyage Financing Arrangement

The details of the deal  are as follows:

Deal Details: Juris Corp advises in relation to a voyage financing arrangement between Vedanta Limited and Citigroup Global Markets Limited

Practice Area: Banking; Trade & Commodity Finance

Deal Value: Confidential

Deal date of closing 10th February 2021

Team Involved

Mr Pratish Kumar Partner 

Mr Ankit Sinha Principal Associate 

Mr Karan Abichandani Associate 

Deal Summary 

Juris Corp advised Citigroup Global Markets Limited (“CGML”) in relation to a unique voyage financing arrangement entered between CGML and Vedanta Limited (“Vedanta”) for the export of aluminium billets (the “Products”). The intention was to ultimately sell the Products to a mutually agreed offtake located overseas. The transaction has been structured such that, as soon as CGML receives the copies of the bills of lading and payment documentation, a pre-payment will be made by CGML to Vedanta. By this time, the Products will already be in the hands of the shipping liner. CGML will take the title over the Products only upon receipt of the original bills of lading. This effectively means that CGML will have unsecured exposure during the above period. Upon CGML receiving the original bills of lading and supporting documents, CGML will then issue a recap to Vedanta confirming transfer of title. Thereafter, CGML will sell the Products to the offtaker by way of a sale agreement. At this time, CGML will instruct for the release of the Products from the warehouse where they are stored to the off-taker. This will result in a transfer of title from CGML to the off-taker. Through this transaction, CGML will be taking a risk on Vedanta for a period 5 days and on the off-taker for an approximate period of 120 days.

Deal significance: Such transactions are uncommon as they involve a high level of risk and entail in-depth structuring and strategizing of arrangements. The distinctiveness and intricacy of this deal also stems from the interplay and analysis of laws of multiple jurisdictions, including the extant Indian foreign exchange laws and maritime laws. Juris Corp played a pivotal role in structuring and guiding the client through the entire transaction, including ensuring tying up of any loose ends.

Law firm (international) that played a prominent role in this deal: Norton Rose Fulbright (Asia) LLP advised CGML on foreign law aspects of this transaction.